the IT investment process—leading to world-class outcomes. The focus of these activities is cross functional, broad, and strategic in nature.
Criteria: CCA, Section 5123 (5); Benchmarking course material from
CCI, Inc.; Best Practices in Information Technology: How Companies
Get the Most Value From Exploring Their Digital Investment, James
Cortada; The Information Paradox: Realizing the Business Benefits
of Information Technology, John Thorpe; Business Process
Improvement: The Breakthrough Strategy for Total Quality,
Productivity, and Competitiveness, H. James Harrington; Better
Change: Best Practices for Transforming Your Organization, PricewaterhouseCoopers.
• IT-Driven Strategic Business Change is the process for using information technology to strategically renovate and transform work processes and push the organization to explore new and better ways to execute its mission. The CIO should be directly involved in this process to ensure that IT strategy is tightly linked to the business strategy and that senior management is “on board” with the IT strategy so that funding does not become an issue.
Criteria: CCA, Section 5123 (5); Breakthrough Process Redesign: New
Pathways to Building Customer Value, Charlene Adair and Bruce Murray; Transforming the Public Sector, David Osborne and Ted Gaebler; The Innovator’s Dilemma, Clayton M. Christensen; Quality is
Free: The Art of Making Quality Certain, Philip B. Crosby.
Optimizing the Investment
Process
The purpose of this critical process is to measurably improve IT investment processes by learning from and adopting the tools, techniques, or methods used by best-in-class external organizations. Improvements can include using innovative investment oversight tools and techniques, changing the mechanics of investment management, or improving the “lessons learned” feedback mechanism. This process is part of an effort to continually improve the value of the organization’s IT investments. Aspects of this process, such as measurement of the IT investment management process, can be implemented in earlier stages; at Stage 5, process measurement becomes an absolute necessity.
Section 5: Critical Processes for the ITIM Stages
•Stage 5: Leveraging Information Technology for Strategic Outcomes ••Optimizing the Investment Process
Process-based benchmarking—the first step in this critical process—is a structured technique for measuring an organization’s IT investment
management processes. It is different from traditional measurement-based benchmarking where an organization compares its performance, cost, and cycle time to those of competitors, to industry averages, or to a consultant’s proprietary data. Once they are benchmarked, an organization’s IT
investment management processes can be modified and improved using the tools, techniques, or methods learned from “best-in-class”
organizations. The performance gains resulting from implementing these process modifications can be measured and should result in IT investment management processes that meet or exceed those of the “best-in-class” organizations.
Figure 22: Optimizing the Investment Process
Purpose To identify and implement measurable improvements in the
organization’s IT investment management processes so that the processes meet or exceed those used by best-in-class organizations. Source: GAO.
Prerequisites:
1. Adequate resources are provided for conducting process benchmarking activities. 2. Organizational managers and staff with responsibilities in this area are trained in process benchmarking techniques or are experienced in using these techniques.
Activities:
1. Baseline data are collected for the organization's current IT investment management processes.
2. External comparable best-in-class IT investment management processes are identified and benchmarked.
3. Improvements are made to the organization's investment management processes.
Purpose: To identify and implement measurable improvements in the organization's IT investment management processes so that the processes meet or exceed those used by best- in-class organizations.
Organizational commitments:
1. The organization has documented policies and procedures for improving its IT investment management process using benchmarking.
2. An official is designated to manage the benchmarking activities.
Section 5: Critical Processes for the ITIM Stages
•Stage 5: Leveraging Information Technology for Strategic Outcomes ••Optimizing the Investment Process
Organizational Commitments Commitment 1: The organization has documented policies and
procedures for improving its IT investment management process using benchmarking.
These policies and procedures typically specify the following:
• As part of the benchmarking activity, performance measurements for the IT investment management process are collected and analyzed to form a process baseline. This baseline should include
• the current, documented IT investment management process, • performance measurement definitions, and
• the expected performance measurement range. • Historical data are used to analyze current performance.
• Leading practices are identified in external organizations to be used as benchmarks for process improvements.
• Significant changes to business processes are approved by senior management.
• The baselines and benchmarks are revisited and updated periodically. Commitment 2: An official is designated to manage the
benchmarking activities.
The organization designates an official to manage this process. This official is responsible for managing the benchmarking activities, ensuring that team members are well trained, and serving as the focal point for this critical process. Whether this official has benchmarking as his or her sole duty may depend on the specific circumstances of the organization. A smaller organization, with relatively simple investment processes, may not require extensive external benchmarking, and so the effort to carry out this critical process may be limited. In a larger organization, with complex and multifaceted investment activities, benchmarking activities may be
extensive and require more focused attention by the responsible official.
Prerequisites Prerequisite 1: Adequate resources are provided for conducting
Section 5: Critical Processes for the ITIM Stages
•Stage 5: Leveraging Information Technology for Strategic Outcomes ••Optimizing the Investment Process
These resources can include
• external organizations or individuals who are responsible for measuring investment process performance and
• tools to support investment process measurement.
Prerequisite 2: Organizational managers and staff with
responsibilities in this area are trained in process benchmarking techniques or are experienced in using these techniques.
For the benchmarking results to be valuable and useful, benchmarking team members must know how to conduct benchmarking studies. To ensure that they are competent, team members must either have recent benchmarking expertise or receive training.
Activities Activity 1: Baseline data are collected for the organization’s current
IT investment management processes.
The board tasks a group with measuring the current state of the investment management process in order to provide a baseline for evaluating expected and actual process changes. Creating this baseline usually involves
identifying and gathering process data on the components of the investment management process. These data typically include • the level of resources an organization expends in conducting IT
investment activities;
• quantitative process results, such as returns on investment and tangible benefits achieved;
• qualitative process results, such as measures of customer satisfaction and contributions to mission achievement; and
• the predefined range of values expected from the performance measurement.
Activity 2: External comparable best-in-class IT investment management processes are identified and benchmarked.
Section 5: Critical Processes for the ITIM Stages
•Stage 5: Leveraging Information Technology for Strategic Outcomes ••Using IT to Drive Strategic Business Change
The purpose of this activity is to find and learn from organizations with more efficient and effective investment management processes. Tasks for doing this include
• identifying best-in-class organizations;
• collecting data from internal, private, and public sources about best-in- class organizations;
• visiting several best-in-class organizations;
• developing working relationships with one or more of these organizations; and
• benchmarking components of the best-in-class organizations’ investment management processes.
Activity 3: Improvements are made to the organization’s investment management processes.
Once an organization has learned from the best-in-class external
organizations, it must apply this knowledge to its own processes. Thus, the organization should
• decide on improvement goals and expectations;
• develop appropriate target activities that will result in measurable process improvement; and
• analyze, rank, and choose process improvement activities.
The organization then creates and executes an improvement action plan. This plan will vary with the type and scope of the benchmarking studies. Executives should review and approve the action plan before implementing it so that (1) they are aware of the process changes and (2) other parties who may be interested in the research and process changes can learn from these initiatives.